Stocks, Bonds & Investing

Spreading your investments around to inrease financial security

• Risk assessment

• Diversification

• Stocks, bonds & cash

• Liquidity trap

Which of the following is the LEAST risky investment?

• corporate bonds

• stocks

• U.S. Savings bond

• mutual funds

Ownership in a publicly traded corporation

• CD-certificate of deposit

• Money Market

• Treasury bill

• Stock

A bond's interest rate is also called its 

• par value
• coupon rate
• face value
• principal

A dividend is a distribution of a portion of a company's earnings

• True
• False

The relationship between risk and return in investing can be stated as:

• higher risk indicates lower potential return
• higher risk indicates higher potential returns
• lower risk indicates higher potential return
• No relationship exists between risk and return

Tags

CCSS.HSS.MD.B.5B

A diversified portfolio is desirable because it...

• Increases the risk/return ratio
• Limits investors' choices to inly one or two investment tools
• Indicates an investor is a good predictor of the return an investment will have
• Decreases risk by investing money in a variety of investment tools

What is a stock?

• A loan an investor makes to a company or government that pays interest over time.

• A share of ownership in a company

• A collection of investments sold as a package.

• An option to purchase something in the future at todays price.

All of the following are ways to earn money as a stockholder EXCEPT:

• getting dividends

• selling the stock at a higher value

• stock splits

• selling the stock at a lower value

Conner wants to purchase stocks with the money he received from his tax return. Who would he contact to make the transaction?

• A brokerage firm
• The New York Stock Exchange
• A real estate agent
• The American Stock Exchange